Differentiation of neutrophil granulocytes (neutrophils) occurs through several steps in the bone marrow and requires a coordinate regulation of factors determining survival and lineage-specific development. A number of genes are known whose deficiency disrupts neutrophil generation in humans and in mice. One of the proteins encoded by these genes, glucose-6-phosphatase-β (G6PC3), is involved in glucose metabolism. G6PC3 deficiency causes neutropenia in humans and in mice, linked to enhanced apoptosis and ER stress. We used a model of conditional Hoxb8 expression to test molecular and functional differentiation as well as survival defects in neutrophils from G6PC3(-/-) mice. Progenitor lines were established and differentiated into neutrophils when Hoxb8 was turned off. G6PC3(-/-) progenitor cells underwent substantial apoptosis when differentiation was started. Transgenic expression of Bcl-XL rescued survival; however, Bcl-XL-protected differentiated cells showed reduced proliferation, immaturity and functional deficiency such as altered MAP kinase signaling and reduced cytokine secretion. Impaired glucose utilization was found and was associated with ER stress and apoptosis, associated with the upregulation of Bim and Bax; downregulation of Bim protected against apoptosis during differentiation. ER-stress further caused a profound loss of expression and secretion of the main neutrophil product neutrophil elastase during differentiation. Transplantation of wild-type Hoxb8-progenitor cells into irradiated mice allowed differentiation into neutrophils in the bone marrow in vivo. Transplantation of G6PC3(-/-) cells yielded few mature neutrophils in bone marrow and peripheral blood. Transgenic Bcl-XL permitted differentiation of G6PC3(-/-) cells in vivo. However, functional deficiencies and differentiation abnormalities remained. Differentiation of macrophages from Hoxb8-dependent progenitors was only slightly disturbed. A combination of defects in differentiation and survival thus underlies neutropenia in G6PC3(-/-) deficiency, both originating from a reduced ability to utilize glucose. Hoxb8-dependent cells are a model to study differentiation and survival of the neutrophil lineage.